The mortgage-lending market has taken a beating lately, with the rate of defaults up to 2.87 percent at the start of 2007, according to Equifax and Moody's Economy.com, higher than levels reached during the 2001 recession. Yet BOK Mortgage, a subset of the Tulsa, Okla.-based BOK Financial, an $18 billion regional financial services firm, stood strong in the face of the crisis and delivered stunning results. In November 2007, we covered BOK Mortgage's efforts to limit delinquent accounts -- an implementation of Varolii Corp.'s early-stage collections application, which went live in January 2007. BOK's overall results during this difficult time, including a massive increase in customer interaction and a significant percentage drop in mortgage delinquency, merit our 2008 Service Elite award.
In the past, BOK Mortgage used an autodialer to place outbound calls to customers failing to make monthly payments within the first few weeks of the month. According to Kenda Ewing, the unit's vice president, as soon as the old autodialer made a connection, the call was routed blindly. "If [the autodialer] connected with a person or even an answering machine, it gave [the] call to the next available loan counselor," she recalls. "They were tied to the autodialer, leaving messages to call back or asking the customer[s] if they had mailed their payment." Sheer volume -- BOK handles 58,199 mortgages -- kept counselors from spending more time helping delinquent mortgage holders; counselors were constantly on the phone leaving messages for everyone.
Scott Sikora, chief technology officer at Seattle-based Varolii, an on-demand communications provider, says it's not unusual for customers to take advantage of his firm's breadth of applications. BOK Financial's retail-banking division was achieving great results with Varolii's overdraft-notification functionality, which brought its early-stage collections application to BOK Mortgage's attention.
Varolii's software-as-a-service delivery model keeps implementation time to a minimum; BOK Mortgage's deployment began at the end of October 2006 and went live in January 2007. Starting on approximately the 17th day of each month, the early-stage collections application allows BOK to contact customers who have not yet made that month's payment. After customers receive the automated message, they can connect into BOK's system to pay by phone or promise to pay by month's end. However, the automated process doesn't leave customers in the dark. If the call takes place during business hours, customers can choose to speak directly with a loan counselor. If it's after-hours, they can still make a payment or at least promise to -- something Ewing says was not possible with BOK's previous autodialer.
The company saw immediate results. Customer interaction rates catapulted 325 percent, and mortgage delinquency dropped by 12 percent. Ewing says more customers who promised to pay kept those promises, something that was a problem in the past when a loan counselor was on the other end of the line. "We had a lot of promises-to-pay that weren't fulfilled," she recalls. "With automated systems, we don't get as many promises-to-pay that don't happen." Loan counselors themselves also benefit from the automated application, she says. "I think the loan counselors are happier," she explains. "They do have more freedom of movement those last two weeks of the month. They have more time to talk with people who really need help."
Ewing says BOK Mortgage's success using the Varolii application is causing other BOK divisions to take notice and inquire about the implementation. "It really has been a great system for us, and there are other collection departments within the bank that are now exploring the possibilities that Varolii has for them," she says. "They want the automation of Varolii."
Key Results: BOK Mortgage

Mortgage delinquency rate fell by 12 percent

Customer interaction rates increased by 325 percent

Loan counselors can now spend time helping customers in later stages of delinquency

Morale among loan counselors improved
[Please Note: To see the 2008 Service Awards Issue's full table of contents, please click here.]